Bata Company Case study on Industrial relation issue

1. A case study on Bata
By
S. Rama krishnan(301228)
K. Raj Kumar(301225)

3. History of the Company
The Company was originally incorporated as BataShoe
Company Limited on December 23, 1931 under Indian
Companies Act, 1913 for the purpose of manufacturing and
marketing of all types of footwear,footwear
components, leather and products allied tothe footwear
trade.
Subsequently, the Company changed its name to.Bata Shoe
Company Private Limited. on April 6, 1956upon conversion
into private company. The Companychanged its name from
Bata Shoe Company PrivateLimited to .Bata Shoe Company
Limited uponconversion to a public company on April
18, 1973.

4. Contd..
The name was once again changed to the currentname, i.e. Bata
India Limited, on April 23, 1973.
The Company was promoted by Leader
A.G., St.Moritz, Switzerland, a member of the multinationalBata
Shoe Organisation (BSO) with a 100% EquityShareholding, and
consequently, the Company too isa member of the BSO.
The BSO consists of independently run companiesoperating in
several countries across the world.
BataLimited, Toronto, Canada acts as the headquarters of BSO

5. CONTD..
 Bata Shoe Organisation provides
an importantinterchange of new manufacturing
technologies,machine design, factory lay-out plans
advertisingmarket forecasts, fashion
trends, modernmarketing techniques, new material
testing andalso information on the most advanced
machineryand technology for production of shoes
are madeavailable to the Bata group of
companies,including Bata India Limited

6. Case facts
Throughout its inception
Bata had shown At the centre of Bata has always
growthin profits, with all labour faced labour
the only loss shown in problems was problems in
1995, but in2000 Bata the BMUor itsmajor factories
again began Bata Mazdoor in West Bengal and
its downward phase union in West Bangalore.
whichwas mainly due to
labour problems. Bengal.

7. Contd..
 The company after making a huge loss in
1995wanted to save itself by bringing in W.K
Westonwho was an expert in turning around
performance.
 Weston brought in his own team and
changed theentire top management of the
company.
 Weston made major changes like
overhaulingoperations and selling the
Bata headquarters inCalcutta to cover losses.
The commercialdepartment was also shifted
to Bata Nagar despiteresistance from trade
unions

8. Contd.
 The management also retrenched 250 managers aswell as
juniors and froze recruitment activities whilefilling up gaps
through internal transfers.
 What added fuel to the fire between management andtrade
unions was the assault on Weston and a senior officer by
members of the union.
 Although Bata had plants in
Faridabad, Bangalore,Patna, Hosur but most of the
output came frombatanagar factory in west Bengal which
was plaguedby influences of political parties which
madenegotiation with trade union very difficult.

9. Contd..
 Assault case influenced the SVP to
stop renewedinvestment plans in batanagar which
broughtinference from CPIM the ruling party at
the time.This brought violence which was more of
apolitical issue then labour.
 Meetings between the management and unionfailed
which led the factory to be shut down for several
months.
 A lockout also took place in Bangalore peenyafactory
in 2000 due to disputes regarding expiry of wage
agreement.

10. Contd..
• Lifting of the lockout also did not solve
anyproblems as employees demanded
thatsuspended colleagues be called back.
• In 2004 Bata began a huge downsizing
activity inwest Bengal which it justified by
stating that it wasoutsourcing its finished
products from china
• This also led the workers to approach
thegovernment to intervene on their behalf.

11. Inferences
The reasons for labour problems in Bata co. Ltd were as
follows:-
• The management failed to make any
meaningfulcommunication with the workers before
making anydecisions.
• Bata had opened factories where trade unions
andpolitical parties had a very strong and
negativeinfluence.
• The interference of political parties ensures that
thematters became violent and through which
suchparties could satisfy their own agenda.

12. Contd..
• The company took drastic steps very frequently
like lock down, retrenchments, downsizing.
• The top management only show the benefits
of the company and not the problems of workers.
• The workers were heavily influenced by
tradeunion and had no logic in decision making.
• Expatriates do not know about Indian culture
andsensibilities of the Indian workers and hence
the decision was not very beneficial.

13. MERCI